AI-Driven Winners and Underperforming Sectors in 2025: Strategic Allocation for 2026

The year 2025 has underscored the transformative power of artificial intelligence (AI), reshaping global markets with stark divergences in sector performance. As enterprises and investors grapple with the implications of this technological revolution, identifying high-conviction opportunities in AI infrastructure while mitigating risks in exposed sectors becomes critical for strategic allocation in 2026.

AI-Driven Winners: Infrastructure and Innovation

The sectors most directly aligned with AI's infrastructure and application have outperformed peers in 2025. The Technology Select Sector SPDR Fund (XLK) surged 23.9%, fueled by demand for semiconductors and cloud computing from companies like Nvidia and Microsoft. Similarly, the Utilities Select Sector SPDR Fund (XLU) rose 20.9%, reflecting the energy-intensive nature of AI operations and the resulting demand for stable power supply. Communication services (XLC) and industrials (XLI) also gained traction, with gains of 16.5% and significant contributions from firms like Meta and Alphabet, which are scaling AI-driven platforms.

Enterprise AI investment has surged to $37 billion in 2025, a 3.2x increase from 2024, with startups capturing 63% of the market in 2025 compared to 36% in 2024. This shift highlights the agility of startups in developing user-facing AI applications, particularly those leveraging product-led growth strategies. However, the focus on immediate productivity gains over long-term infrastructure investments raises questions about sustainability. According to Deloitte's 2025 survey, 85% of organizations increased AI spending, but most expect ROI only after two to four years-far longer than typical technology investments.

Underperforming Sectors: Constraints and Challenges

While AI has driven growth in certain sectors, others have lagged due to structural constraints. Healthcare, for instance, saw a modest 5.3% increase in 2025, hindered by challenges in drug pricing and insurance sector instability. Energy underperformed with a 1.4% gain, as low oil prices and increased OPEC supply dampened returns. Consumer staples, meanwhile, struggled with shrinking margins and shifting consumer preferences, exacerbated by AI-driven automation that risks eroding trust if not managed transparently.

The energy sector faces a dual challenge: AI's exponential growth is straining infrastructure, with data centers projected to consume 945 terawatt-hours of electricity by 2030. This demand pressures traditional energy providers to accelerate clean energy transitions, yet infrastructure bottlenecks and slow grid modernization remain significant hurdles. In healthcare, AI adoption risks displacing entry-level roles and perpetuating algorithmic biases, necessitating robust governance frameworks to ensure ethical deployment.

Strategic Allocation for 2026: Balancing Growth and Risk

For 2026, strategic allocation must prioritize AI infrastructure while addressing sector-specific risks. High-conviction opportunities lie in semiconductors, cloud computing, and data center infrastructure, which underpin AI's scalability. However, investors should remain cautious about overexposure to sectors with unresolved sustainability challenges, such as energy, and those facing workforce displacement risks, like healthcare.

In the energy sector, allocations should favor companies investing in grid-scale storage and renewable energy solutions to align AI-driven demand with climate goals. For consumer staples, brands must prioritize transparency in AI usage to rebuild consumer trust, leveraging AI for hyper-personalization while ensuring data integrity. Healthcare investors should focus on firms developing explainable AI systems and ethical governance frameworks to mitigate risks of bias and deskilling according to research.

Conclusion

The AI revolution of 2025 has created a bifurcated market, with infrastructure-linked sectors leading and others lagging due to operational and ethical constraints. As we approach 2026, strategic allocation must balance the promise of AI-driven growth with the realities of infrastructure strain, workforce displacement, and sustainability. By prioritizing sectors with robust infrastructure and addressing risks through governance and innovation, investors can navigate the AI-driven landscape with confidence.